Tom McGowan: Sure. First of all, we have a very limited active development pipeline, which is moving along very well on time and on budget. On the future opportunities, there is – there are several here that we’ll start with the first one, Hamilton Crossing and Carmel, a very, very strong suburban of Indianapolis. We’re working on a plan with 400 apartments and that is ongoing process of underwriting and trying to understand the particulars of that. Another one is Carillon, which is a 50-acre parcel. Just these are the city, you know, in Washington and that’s something that we’re taking a very measured approach to, in terms of trying to determine the best utilization, the land and the best timing in which to do that. The one that we have the most momentum on is One Loudoun and One Loudoun’s – you know, one of the great, great growth counties in the DC area.
So we are working on a more particular plan of growth for that project. And that’s something that we could probably offer more color as we move into ’24. But all of these were being extremely conservative and measured in terms of how we approach them.
John Kite: Dori, just let me add to be specific to your – I think to the question. In terms of the medical office building at Carillon, we’re in the process of finishing that. And as we said in the past, our objective is to get it leased up and sold. And that’s the path that we’re on. So we don’t intend on owning that long-term, but we do want to maximize the value. So we’re still going through some lease up there. And as Tom said the residual land there is a different situation than it is at One Loudoun. And so over time, we would look to either monetize it outright or potentially partner with other developers vis-a-vis land contributions, but not looking to put significant capital into that. Whereas the returns and the quality of One Loudoun there, that’s continuing to invest new capital into that.
Dori Kesten: Okay, got it. Thank you.
John Kite: Thank you.
Operator: Thank you. And our next question is from Wesley Golladay with Baird. Please proceed.
Wesley Golladay: Hi, everyone. You had a nice spike in the overage rents. Was this you know, taking advantage of some vacant space you had for some seasonal tenants or is it strong sales throughout the portfolio?
John Kite: No, Wes, it’s really just continued strong sales, as we’ve talked about in the past, in the last year overage rent has been materially higher than it has been in previous years. So we just continue to see that growth. I’m sure in – you know, and the current quarter will probably see a little additional rent from short-term tenants like Halloween stores, et cetera, but it’s not material.
Wesley Golladay: Okay. And then a follow-up question on the balance sheet was that $0.02 there a noncash impact. Is that an annual number, should we rather we do that through next year? And then can you talk about what a potential rating upgrade can do for you on the debt for spreads?
Heath Fear: Yes, I’ll answer in reverse. So on the debt, I think just the outlook changes, probably 5 to 10 basis point proposition. Again we said we’re hopeful in 12 to 18 months, that gets upgraded to a full BBB, obviously trying to make progress with Moody’s as well and had some good discussion with them. So we’re again optimistic that we’ll see a change from them and we get a full ratings upgrade that’s maybe 25 to 30 basis point deduction and spread as well. And then in terms of the noncash that’s happening in June of 2024. And so, I wouldn’t rule that forward to the following years. So that’s just a $0.02 hit into next year.
Wesley Golladay: Okay, thanks a lot.
John Kite: I believe it’s twice a year, right, guys? And that in two quarters now?
Heath Fear: That’s a very different way. So particularly with that – the swap, I think you’re talking about the swap, John? And so you do get a bit of a swap next year, right?
Wesley Golladay: Yes.
John Kite: Yes, I thought that was your question. That’ll keep running through for another nine years. So what’s odd about that and we’ve talked about it before is that, that benefit until we actually do a transaction to attach that swap to, it happens twice a year. So you see that benefit in the second – I’m sorry, in the first quarter and you see the benefit in the third quarter.
Wesley Golladay: Got it. Okay. That’s all from me. Thanks, John. Forgive my follow-up.
John Kite: Thank you.
Heath Fear: Thanks, Wes.
Operator: Thank you. One moment for our next question. And it comes from the line of Michael Mueller, please proceed. Michael Mueller, we lost you. [Operator Instructions] Mr. Mueller from JPMorgan. Please proceed.
Michael Mueller: Yes. Hi. Two quick ones. One, I know leasing is going very well, it sounds like the demand picture is good, but what do you think the macro item would be that would cause retailers to slow down the decision-making? That’s the first question. And then just a second quick number, one, any color on fee income trends over the next few quarters?
John Kite: Let me start with. I’ll take the first one first. But what did you mean by any color on the income trend?
Michael Mueller: Fee income. Fee income.
John Kite: Fee income, all right. I missed the first – we’ll hit – let’s go backwards. Look, I think in terms of – what was the first part of that question? Now I’m lost.
